33% of people who retire have no savings at all, and 40% of those are baby boomers who retire without sufficient savings. The result? Many seniors today either retire late or are unable to retire comfortably because their savings can’t keep up with the lifestyle they are accustomed to. But retiring on a fixed income is possible, provided that retirees take the right precautions with their finances.

Limitations of Living on Fixed Income

Retirees may resent having to scale back on food, entertainment, or travel after putting in 30, 40, or 50 years in the workforce.. It is natural to feel entitled to more of life’s pleasures, but budgeting takes on a whole new meaning within the confines of a fixed income.

Think of retirement dollars as fitting inside a box. Everything has to move around inside of it, so in order to increase in one area, something else inside the box will have to decrease. Of course, some items in the box are non-negotiable, such as health insurance and medications. Other items, such as food, clothing, and entertainment, can be reshuffled inside the box. Unless there is a way to add more dollars to the box, there may be concessions that will have to be made.

Ways to Stretch Further

The key to living comfortably on a tight budget is learning how to make each dollar stretch further:

  • Eat less meat or buy less expensive cuts.
  • Buy items, such as paper goods and canned goods, in bulk.
  • Buy larger packaged items that can be divided and frozen.
  • Take full advantage of senior discounts.
  • Pay for expenses with a high-reward credit card (spending no more than what you earn), and use the reward points for travel and other expenditures.
  • Find and utilize free memberships/samples/etc. as much as possible.

Another way to stretch one’s retirement income is to work part time outside the home to provide some additional discretionary funds. Although it may seem discouraging to return to the workforce, the flexibility offered by retirement is a great opportunity to work in a field you enjoy, rather than worrying about how big of a paycheck you’re bringing home. For example, if you enjoy woodworking, apply for a job at a home improvement store. If you love animals, apply for a job at a pet store. A sure fire way for the brain to atrophy is to do nothing.

Selling One’s Life Insurance Policy

This controversial practice allows the policy owner to sell the policy to investors for a percentage of its value to be cashed in at the death of the policyholder. If a policyholder has been paying premiums for a whole life insurance policy since his children were little, and they are now grown with families of their own, it may be time to sell it and use the proceeds to supplement retirement.

Some states have severely restricted this practice, and life insurance companies object strictly from a financial standpoint because it is inevitable that they will have to pay death benefits rather than possibly having the retiree drop the policy to save paying premiums. Just as in any transaction, however, the retiree should be well educated about the facts before proceeding.


While social security is supposed to be a supplement to retirement income, 33% of retirees depend on it completely. With the cost of elder care rapidly rising, some retirees who are accustomed to a middle class standard of living may be in for an unpleasant surprise. But if you were not the most responsible in preparing for retirement, don’t despair — you can still enjoy a fulfilling retirement.



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